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WTO rules against U.S. on meat labeling

WASHINGTON – The federal government has not done enough to fix a measure that requires steaks, pork chops and other meat products to carry country-of-origin labeling, an international trade panel ruled Monday, siding with Canada and Mexico against the United States.

The World Trade Organization said the latest country-of-origin labeling (COOL) measure provided less favorable treatment to livestock from Canada and Mexico than it did from the United States.

The Agriculture Department issued the new rule after the World Trade Organization said in 2012 that an earlier version unfairly discriminated against meat shipments from Canada and Mexico. The neighboring countries took their case to the WTO again, arguing the revised rule also was discriminatory against their livestock, raised producer costs and hurt their ability to compete with meats produced in the United States.

Country-of-origin labeling, which went into effect in November 2013, requires that labels identify where animals were born, raised and slaughtered. Meat packages must include a label indicating, for example, that the animals were “Born, Raised and Slaughtered in the U.S.” or “Born and Raised in Canada, Slaughtered in the U.S.”

“The amended COOL measure increases the original COOL measure’s detrimental impact on the competitive opportunities of imported livestock in the U.S. market, because it necessitates increased segregation of meat and livestock according to origin; entails a higher record-keeping burden; and increases the original COOL measure’s incentive to choose domestic over imported livestock,” the WTO said in its decision.

A spokesman with the U.S. trade representative said the agency was disappointed with the ruling and was “considering all options, including appealing the panels’ reports.” The United States has 60 days to appeal.

The rule also has come under attack from farmers and ranchers who say the requirement is a breach of global trade rules and saddles them with extra costs of more than $600 million annually. They also have argued the labeling rule violated their free-speech rights. But lawmakers and consumer groups who back the rule say it provides more information on the label and increases its usefulness to shoppers buying beef, pork and chicken at supermarkets.

Canada was the largest market for U.S. goods in 2013, while Mexico was the second-biggest.

Exports to both countries totaled more than $525 billion in 2013, up $18 billion from 2012. Canada also was Montana’s biggest market, and Mexico the seventh-largest, with shipments for the two countries totaling $652 million in 2013.

In a letter this month to the top Republican and Democrat on the Senate Appropriations Committee, Sen. Jon Tester, D-Mont., and 31 other lawmakers urged Congress not to weaken the labeling law.

They said a failure by Congress to fully fund the measure would deprive consumers of the right to know more about where their food comes from and make it more difficult for U.S. producers to stress the local origin of their products.

Tester said Monday the White House should appeal the WTO decision.

“American families have the right to know where their food comes from,” he said. “COOL helps them make informed decisions for their families, while also recognizing our local producers.”

Bill Bullard, head of the national cattle producer organization R-CALF in Billings, said the United States has the tools to address the ruling without weakening or suspending it.

“While we will be reviewing this lengthy decision to determine what, if any, additional modifications should be made to COOL, we urge the United States to exercise its right to appeal this decision and we fully expect that this dispute over COOL will continue at the WTO for many more months if not years,” Bullard said.

Canadian officials said in a statement it will closely watch to ensure the United States makes the necessary changes to the rule to comply with the WTO. It warned of retaliatory measures if the United States failed to comply.

“Today’s WTO compliance panel’s report reaffirms Canada’s long-standing view that the revised U.S. COOL measure is blatantly protectionist and fails to comply with the WTO’s original ruling against it,” Ed Fast, Canada’s trade minister, and Gerry Ritz, its agricultural minister, said in a joint statement.

“We will continue to fully assert our rights to achieve a fair resolution to our concern, including seeking authorization to implement retaliatory measures on U.S. agricultural and non-agricultural products if and as necessary,” they said.